Spy.. Where we stand

Soo... I will go in detail for you so you can see where my POV comes from..
A summary of this post is a bounce. Back to 525-530 and then a possible new low to 470..

Let's start on the monthly time frame..
I will show you the chart regular then I will show you log scale (Logarithmic).

regular
Price is nearing a 5yr trend support
That support is at 495-500. There's a gap at 495 to close from April 19th 2024.. I would say if we were to gap down Monday below 500.00 that's where they will take this before buying it back up to 510.

Now do I think the correction Is over here at this trendline support? I'm leaning at it's a 70% chance we will break this support before End of May.

Why? Because of the sectors.. XLC and XLF is promising more pain to come.. imagine Spy as a car, the sectors are the important parts to keep things in motion . I'll get to the sectors later but let's stick with spy..

Now here's a monthly chart again but this time Log scale

As you can see with exception of the Covid crash spy has pretty much channel traded this the last 14yr bull run

Let's zoom in
As you can see, the bottom of this channel is around 2021 high 477. So I think Spy is headed there before End of May , it could happen sooner but you have to factor in A rally and i don't know how long that can last.

Also monthly chart log scale is showing similar outlook

Zoomed in

Lastly
Monthly log scale
Same as Qqq and spy, headed back to 2021 high

NYA no log scale

So I've showed you the indexes now I will show you (Financials) and (Meta, NFLX)

Here's XLF price is headed back to trendline support 38-39.00 by end of May; that's another 10% drop which supports my theory that spy will tag 470

Zoomed in
XLF
Monthly 50sma aligns with trendline support so that's your target. I think any bounce on banks going into earnings should be faded!

XLC
I can't hammer on the table hard enough about how much pain is coming for this sector and it's tech stocks.. compared to the other sectors this hasn't even got started with the selling when looking at its monthly RSI and MFI. Friday price stopped right at its previous ATH

we are headed back to 82.00 which is another 8% drop on this sector, if 82 doesn't hold them , 60 comes next.. If you OWN meta on NFLX I hope you have a 5yr outlook because there will be pain

..

Now let's get into the bounce, I think a nice bounce comes next week as long as spy opens Monday above 495.00

When it comes to being oversold one of the most reliable tools I like to use is the PRICE RANGE tool with 20sma.
When you look at spy, you'll notice that in a normal market it usually moves between 2½-3½% from it's 20sma.

As of Friday's close we are 10% away from it's 20sma

This type of extension is extreme
Below I will post the last time spy was over 8% extended from it's 20sma and you can see what happened the next few sessions

June 17th 2022

Jan 24th 2022

June 8th 2020

March 2020 Covid crash

Dec 2024 2018

So in the last 7yrs spy has on dropped more that 8% from it's 20sma 5 times and with the exception of the Covid crash 10% extension was the area where you saw price Rallied back within days to retest the 20sma.

So that places us bouncing this week. Now the 20sma is fluid so even though the 20 is at 559 right now depending on how long spy takes to get there the 20ma could gravitate lower
I think 536 gap close minimum comes before we break below 495.

I will update this more tomorrow.. this right up took awhile

Note

2 more things I wanted to go over and that was and .

is the Chip sector , this was the first big tech sector bubble to pop , starting back July 2024.

Monthly chart (Logarithmic)
Just like every other index and most sectors this is headed back to decade long support. Fun fact , most monthly trendline are created by Monthly moving averages; in the case with SMH that moving average is the 50ma.

Here's a zoom in of the monthly and your target with the 50ma

In the last 16yrs , what ever the global crisis this Chip sector has never closed below that monthly 50.. for the long term investor this should be an amazing spot to build a position long in and $TSM.
So wait for 155-160 on SMH to build a serious position

Monthly chart

Breached trendline support which it has only done twice in the last 2 years. But something I notice is they next month there usually follows up with a face ripping rally.

Zoomed in on the weekly and based on the structure it looks like 160's is incoming before this is all over.

The white trendline is the monthly trendline.
The yellow trendlines was the accumulation area from 160-200.

Since we are back below 200 I think 160 will come but if the market decides to rally we could see a nice bounce back into these levels

White trendline would be my first target -190
Over 180 and I like longs to 190.

190 will be very tough to break across so id cover my longs there.. over 192 and 200 retest comes.
I don't think we can break across 200 unless this is resolved so id look to reshort there.

Bigger picture is the is a Bearish ascending wedge playing out on IWM with a 160 TGT

Note

Good morning...

Keep it simple.. below 490 and Spy heads to 477..

Below 475 and 462 -465 comes.

Spy above 500 and 510 is your first target
Above 510, 515 then and finally 526 can come

Note

Quick update.. Good bounce but I don't think it's done.. 465-470 is incoming.

Id like to see 537.00 gap close first but let's see what happens.. if you are swinging longs have enough time just Incase they go for 465 first

Note

Good morning! RSI is in the trenches which makes opening up new shorts a bad idea on my opinion

Price action for the last 2 days on spy has traded inside this yellow channel which gives a 2% range for scalpers.. as long as 480.00 holds I still think a bounce to 536-547 is in the cards

Note

Until this Vix gets back below 30.00 take any bounce with a grain of salt... And when the Vix approaches the expect a big bounce off prior support

Note

As far as today... Longs only over 505.00, target 515.00

Shorts below 492.00
Targets are 485 and 480.00

Note

Keep your eye on
Close beneath trendline and 20ma ..
Over 282.00 and they pump this back to 287.00

Below 278.00 and they flush it down to 272 or 50ma

Note

Go to your monthly on
You see the 50ma?
Now go to your weekly on Spy , you see the 200ma?

Both are in the area of 465

A test of that area will come but I still think a decent bounce back to 536 -550 comes first

Note

Remember, you came here to Trading View for help with technical analysis or to share your viewpoint on technical analysis. So if I tell you that the RSI on the index is 20 and that it's to extended from it's 20sma too short PLS DONT BRING TARIFF NEWS INTO THIS. As far as I'm concerned it's all noise and theater.. the charts told me this could happen last summer and here we are. Yeah sure , the tariff war gave it the nudge it needed to roll over but what came first, the technicals or the news? Chicken or the egg?

So I'm telling you I can see this going as far down as 462 max and then bottom, now we'll see if and when that area comes does some "NEWS" come that validates the technicals

Note

We are still 11% away from the 20ma on the daily timeframe..
Add that to the fact that the RSI is at 20 and the stage is set to trap any fresh shorts down here..
I think we could see 536-540 by by next week.. id rather open new shorts there

Note

15min..
Below 492 was my short entry.
That low has held.. this would be the Fawkery into Friday

Note

Daily chart.. if they close over 525
We will push up to 548 / 21ema..

Don't fade this

Note

Daily bullish engulfing with volume .. 🚀

Note

The Indexes going into tomorrow will latest their 21ema from there we will see what happens.But the real test will come IF and WHEN tests it's weekly 50ma. The market goes nowhere without tech and Tech line in the sand is weekly 50

Catch you'll later

ContraryTrader

Also on:

Related publications

NYA (XLV, XLF,XLE, DJT,IWM)

by ContraryTrader